3 views on globalization
new force in recent times
long running historical evolution
pendulum swinging between extremes
base of the pyramid
vast majority of humanity, about 4 billion people, make less than 2000 a year
bottom billion
concentrated in africa and central asia, small countries, stuck at the bottom in terms of growth, income, and human development
top tier
over $20,000
about 1 billion
second tier
2000-20,000
about one billion
nongovernment organizations
advocacy and operational
formal rules
established regulations and procedures that must be followed
informal rules
cultures, ethics, and norms play an important part in shaping the success and failure of firms around the globe
institution based view
leading perspective in global business that suggests that the success and failure of firms are enabled and constrained by institutions
bounded rationality
necessity of making rational decisions in the absence of complete information
property right
legal right to use an economic property/resource and to derive income and benefits from it
patent
for new inventions
copyright
for work
trademark
for brands, names, designs
drivers of economic development
culture geography institutions
culture
collective programming of the mind which distinguishes the members of one group or category of people from another
religions
christianity, islam, hinduism, buddhism
context approach
low v high
cluster
countries that share similar cultures
civilization
highest cultural grouping of people and the broadest level of cultural identity people have
power distance
extent to which less powerful members within a country expect and accept that power is distributed equally
high power distance
autocracy, supervising, expectation of power differences
low power distance
consultative mgmt, consciousness of rights
dimension approach
individualism v collectivism
uncertainty avoidance
long term orientation
how much emphasis is placed on perseverance and savings for future betterment
long term characteristics
relationship order by status, positive ass. w economic growth, sensitivity w social contracts
short term characteristics
focus on tradition, old school, negative ass. w economic growth
weak uncertainty avoidance
cultures that view conflict as natural and potentially positive
strong uncertainty avoidance
cultures that view conflict as a threat and to be avoided
criticism of hofstede
cultural and national boundaries are diff
western bias
national v organizational culture
culture is dynamic
Foreign Corrupt Practices Act (FCPA)
enacted in 1977 that bans bribery of foreign officials
cultural intelligence
ability to understand and adjust to new cultures
institution based SWOT
O, T, constrained by formal v informal
resource based SWOT
S, W, identify and leverage sustainable competitive adv.
resource
tangible and intangible assets a firm uses to choose and implement its strategies
tangible resource and capability
assets that are observable and easily quantified
intangible resource and capability
assets that are hard to observe and difficult to quantify
value chain
stream of activities from upstream to downstream that add value